Economy Watch: Housing Starts Spike
- Jan 18, 2013
The Census Bureau reported on Thursday that private housing starts in December came in at an annualized rate of 954,000 units. That’s 12.1 percent more than the revised November total of 851,000, and a whopping 36.9 percent above the rate of 697,000 in December 2011. All together, an estimated 780,000 U.S. housing units were started in 2012, which is 28.1 percent above the 2011 figure of 608,800, and another whopping number.
Single-family housing starts in December were at an annualized rate of 616,000 units, which is 8.1 percent higher than the revised November figure of 570,000. The December rate for units in multifamily buildings (five or more units), which tends to be more volatile than the single-family rate, was 330,000.
Housing permits—a forward-looking indicator—didn’t move much from November to December, according to the Census Bureau, seeing a 0.3 percent month-over-month increase. But the number of housing permits in December 2012, which was at an annualized rate of 903,000, was 28.8 percent higher than the same month a year ago.
Negative equity still shrinking
CoreLogic reported on Thursday that one of the most persistent hangovers from the housing crash, namely negative equity, was down again during the third quarter of 2012. The company estimates that about 100,000 more borrowers reached a state of positive equity by the end of the quarter, adding to the more than 1.3 million borrowers who moved into positive equity earlier in 2012.
About 10.7 million, or 22 percent of all residential properties with a mortgage, were in negative equity at the end of 3Q12. That’s still a high number, but it’s down from 10.8 million properties, or 22.3 percent, at the end of the previous quarter.
In dollar terms, negative equity decreased from $689 billion at the end of the second quarter of 2012 to $658 billion at the end of the third quarter. The decrease was driven in large part by an improvement in house price levels, according to CoreLogic.
Unemployment claims dip
Unemployment claims for the week ending Jan. 12 were 335,000, a decrease of 37,000 from the previous week’s revised figure of 372,000, according to the U.S. Department of Labor on Thursday. The four-week moving average was 359,250, a decrease of 6,750 from the previous week. The weekly number is at its lowest level since January 2008, and the four-week average is almost as low as it was then.
Wall Street gained on the good news on Thursday, with the Dow Jones Industrial Average up 84.79 points, or 0.63 percent. The S&P 500 advanced 0.56 percent and the Nasdaq rose 0.59 percent.